The risks of digital currency

I gave an overview of digital currencies like Bitcoin last week, and how it seems to be working, at least as an investment.

But as a currency without a government, it lacks the protections that these large, bureaucratic entities can provide.

Since Bitcoins gained notoriety, inflation and a bit of a market crash, their value has been slowly growing again.

And in 2012, two major Bitcoin exchangers — online companies that allow for the trade of digital currency and fiat currency — were hacked and over $250,000 U.S. worth of Bitcoins were stolen. That is, large numbers of Bitcoin information was transferred inappropriately to one account.

Despite the anarchic nature of Bitcoin, the data involved is still considered personal property and therefore is illegal to steal.

According to The Daily Tech, the Bitcoin thief has not tried to transfer the Bitcoins since the hack. When and if they do, the transactions will be public and the information could be used to track down the thief.

The lesson Bitcoin investors are taking away from this incident: Don’t put all your Bitcoins in one basket.

This entry was posted in Banks, Consumer issues, credit, Investing, Stephanie Reighart, Technology, Uncategorized and tagged , . Bookmark the permalink.

One Response to The risks of digital currency

  1. Pingback: York Common Cents | Bitcoin update: Was the recent price increase a blip or a bubble?

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